The Fair Labor Standards Act (FLSA): An Overview - MSPB Watch

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The Fair Labor Standards Act (FLSA): An Overviewpassed, and the President signed, the Insular Areas Act of 2011 (P.L. 112-149). The act delayedthe increases in the minimum wages in American Samoa for 2012, 2013, and 2014. The nextminimum wage increases in American Samoa are scheduled for September 30, 2015. Thereafter,increases will be made every three years until they reach the federal minimum wage.In the mid-1970s, the United States and CNMI entered into a Covenant of Association. CNMIretained control over the minimum wage in the islands. However, as was the case with AmericanSamoa, P.L. 110-28 mandated that the minimum wage in CNMI be raised by $0.50 a year until itreached the same level as in the continental United States. However, P.L. 111-244 postponed thescheduled increase in the minimum wage for 2011. On September 30, 2012, the minimum wagein CNMI increased by $0.50 an hour to $5.55.OvertimeUnder Section 7, employers must pay covered workers at least one-and-a-half times their regularhourly wage for hours worked over 40 hours a week at a given job. Employers may choose to paymore than time-and-a-half for overtime or to pay overtime to employees who are exempt fromovertime under the FLSA.Under the FLSA, overtime pay applies to hours worked in excess of 40 in a workweek. Thus, thelaw allows some flexibility in work hours. For example, an employer could schedule four 10-hourworkdays in a workweek without asking employees to work overtime. Similarly, an employeewho works a five-day workweek could work four hours one day and nine hours the other fourdays and not work overtime. 30Comp Time in Lieu of Overtime PayThe FLSA, under Section 7(o), allows covered, nonexempt state and local government employeesto receive compensatory time off (“comp time”) for hours worked over 40 in a workweek. Comptime is time off with pay in lieu of overtime pay. An employer and employees must agree that theemployer will provide comp time. The agreement may be through a collective bargainingagreement or, if there is no such agreement, between the employer and individual employees.Comp time is calculated at a rate that is at least one-and-a-half times the number of overtimehours worked. In general, state and local government employees may accrue up to 240 hours ofcomp time. Law enforcement, fire protection, emergency response personnel, and employeesengaged in seasonal activities may accrue up to 480 hours of comp time. Instead of providingcomp time, an employer may pay an employee for any unused comp time. An employee must beallowed to use comp time on the date requested, unless doing so would “unduly disrupt” the(...continued)Territory of Guam, and for Other Purposes (P.L. 111-244).30 Some states have overtime laws that are more protective of employees than the FLSA; for example, overtime paymay be required if an employee works more than 8 or 12 hours in a day. See U.S. Department of Labor, Wage andHour Division, Wage and Hour Division (WHD) Minimum Wage Laws in the States, January 1, 2012,http://www.dol.gov/whd/minwage/america.htm.Congressional Research Service 8
The Fair Labor Standards Act (FLSA): An Overviewoperations of the agency. 31 Section 7(o) does not apply to state and local government employeeswho are exempt from overtime. 32Break Time for Nursing MothersThe Patient Protection and Affordable Care Act (PPACA, P.L. 111-148) added new Section 7(r) tothe FLSA. 33 Section 7 of the FLSA requires employers to pay at least time-and-a-half toemployees who work overtime. Section 13 of the FLSA provides several exemptions to theovertime requirements of Section 7. Thus, new Section 7(r) does not apply to employers oremployees who are exempt from overtime.Section 7(r) requires covered employers to provide break time for nursing mothers. Break timemust be provided for one year after the child’s birth. Employers must provide space, other than abathroom, that is shielded from view and free from intrusion from coworkers and the public. Onlyemployees who are not exempt from the FLSA’s overtime pay requirements are entitled to breaktimes to express milk. Employers with fewer than 50 employees are not subject to therequirement if compliance would impose an undue hardship on the employer. Employers are notrequired to compensate nursing mothers for breaks taken for the purpose of expressing milk.Exemptions from the Minimum Wage or OvertimeStandards of the FLSAMost wage and salary workers are covered by the FLSA. However, under Section 13 of the actcertain employers and employees are exempt from coverage. They may be exempt from either theminimum wage or overtime standards of the act, or both. This section considers some, but not all,of the current exemptions in Section 13. The focus is on those exemptions that have been thesubject of recent legislation, hearings, or oversight.Executive, Administrative, and Professional EmployeesWhen the Fair Labor Standards Act (P.L. 75-718) was enacted in 1938, Section 13(a)(1) providedan exemption, from both the minimum wage and overtime requirements of the act, for bona fideexecutive, administrative, and professional employees (the EAP exemption). 34 The act did notdefine the terms executive, administrative, or professional employee. Instead, the law stated thatthe terms would be defined in regulations issued by the Secretary of Labor. 3531 29 C.F.R. §§553.20-553.28.32 Federal employees can receive comp time under the Federal Employees Flexible and Compressed Work SchedulesAct of 1982 (P.L. 97-221). Comp time may be used by both exempt and nonexempt employees. U.S. Office ofPersonnel Management, Compensatory Time Off, http://www.opm.gov/OCA/pay/html/comp.htm.33 Section 7(r) of the FLSA was added by Section 4207, “Reasonable Break Time for Nursing Mothers,” of PPACA.34 For more information on the exemption for executive, administrative, and professional employees, see CRS ReportRL32088, The Fair Labor Standards Act: A Historical Sketch of the Overtime Pay Requirements of Section 13(a)(1),by William G. Whittaker.35 Originally, the FLSA stated that regulations implementing the EAP exemption would be issued by the administratorof the newly created Wage and Hour Division (WHD) of DOL. The Fair Labor Standards Amendments of 1961 (P.L.(continued...)Congressional Research Service 9
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